Things that matters! About digital transformation, design, culture and lifestyle in the Networked Society

Most innovation is directly or indirectly driven by new technology – even business model innovation and changed consumer behaviors – and the way new technology transforms our world and various markets. In this way then, an understanding of new technology and its impact is a prerequisite to be able to innovate, and to do it constantly.

So, how are emerging technologies, such as 5G, artificial intelligence, and virtual and augmented reality contributing to innovation? They do it mainly in three overall ways:

As founder of new markets

As vehicle for innovation

As enhancer of human capabilities

Let’s go through these three ways one by one:

Technology as founder of new markets

New technology has a huge impact on markets and market dynamics. This has always been the case, but in the digital age this is happening faster than ever before. Over the last decades we’ve seen how digital technology has disrupted many different markets. Streaming has disrupted the music industry, as well as TV and film, and social media has radically disrupted the entire media sector.

Let’s take a look at 5G – a technology that Ericsson is developing. As 5G starts to become a reality in the marketplace, many new capabilities and possibilities emerge, such as network slicing, ultra-low latency, lightening fast speeds, and extreme reliability to mention a few. And these capabilities are enabling many new use cases: from remote controlling vehicles in a mine to small sensors that have 10 years of battery life. These technology features will transform the current logic in many businesses and create new markets for those who sees the possibilities.

When new technology becomes established in our society it also drives new behaviors among people and their role as consumers, and these new behaviors represent potential new markets. The same thing happens in industries: when a new technology becomes available organizations can possibly change areas within their business, such as value chains and operations, but also whole business models and the entire market itself.

Artificial intelligence (AI) is another hot technology area that will open new markets and market niches in many industries. Today, most areas are related to innovation efficiency and effectiveness (the areas to the left in the model I described in my previous blogpost).

Technology as vehicle for innovation

As we’ve previously discussed, innovation and technology are tightly interlaced. Two very notable ways technology propels innovation forward is that it boosts tinkering and experimentation, and that in itself accelerates innovation processes.

Not long ago experimentation with new technologies was only possible by multinational corporations or government-funded research labs. Today, affordable technology – digital and other – makes it possible for most enterprises – big and small – to experiment with ideas and concepts in whole new ways, and also in reality instead of only in test labs.

For example, it’s now possible to test products and services online at a very low cost, as well as test out updates, alterations and tweaks. Prototyping has become available to all through easy to use software and 3D printing. AI can simulate various market scenarios based on available real-life data. Virtual reality makes it possible to create completely new types of blueprints that actually make products and services come alive for real, and thus make them possible to evaluate prior to building or manufacturing them.

Digital technology and the new technologies that it enables (like AR, VR and AI) cut the traditional industrial age innovation process short. What used to take years of planning, testing, and executing can now be accomplished in months and sometimes even weeks.

Another way emerging technologies – AI in particular – can speed up innovation, is by removing obstacles of uncertainty or lack of information. Continuously identifying and ruling out hypotheses at a quick pace will no doubt make the innovation process more focused and effective in generating strong solutions. AI, being far superior to humans in analyzing big amounts of data in an instant, cuts innovation processes significantly. Data is the protein of AI systems: if there is a sufficient amount of data, AI will be able to increase the speed of innovation.

Technology as enhancer of human capabilities

One way of looking at it is that digital transformation, after having transformed domain after domain, has reached technology itself and is beginning to recursively transform technological evolution as we know it. This unlocks a great potential, but it also raises concerns as to what it means that technology – and not only humans – has control over technological progress. As discussed further, there are both optimistic and pessimistic stances in regard to our technological future.

Regardless of position in this matter, it is clear that emerging technologies are becoming increasingly important in the very process of innovation.

Now, technological evolution has reached a point where it can help us overcome – or at least circumvent – our own cognitive short-comings. Where the human mind fails to display characteristics beneficial for driving change and creative thinking, technology can give us an extra push towards a greater innovative capacity.

One area close to my heart is design, and in particular design and innovation. The designer today has a completely new set of possibilities and tools for designing and prototyping. Both rapid as well as creating shapes and interactions that would have been impossible a decade ago.

Another example is seen in car manufacturing, were companies are starting to do car models in VR instead of the super expensive and time-consuming clay model that was traditionally used. And in the same industry, there are newcomers such as Local Motors who are challenging the traditional way of designing and producing cars using crowd sourcing, open source and 3D printing technologies for physical prototyping and production.

Finally, and to summarize, an understanding of new technology is necessary in two primary capacities:

Understanding technology as a starting point: Organizations that want to innovate must (in most cases) understand the seedbed that new technology creates for any market today. How has new technology changed the conditions in your market and what technologies are out there that will transform your products and services, and how do you model them for the market?

Understanding technology as an enabler: The second capacity in which an understanding of technology is necessary for innovation is as an enabler. For example, how new technology can help make new ideas and inventions possible to realize on the market. Technology is also an enabler for experimenting with new ideas and testing out new concepts, and organizations that understand how to utilize new tech in this phase of innovation will gain leverage that other organizations lack.

So, how will 5G, AI, VR and AR, contribute to innovation in your industry? Do you see the possibilities, or only threats?

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Mikael Björling

Mikael is Senior Lead Designer at Ericsson UX Lab and an Ericsson Evangelist. He was previously Director at the Networked Society Lab. His specialty is in understanding how consumer behavior, emerging technologies and new industry logics are shaping the future society and in the intersection of these areas build great user experiences. Mikael believes that with the ongoing digital transformation we have a great opportunity to shape a better world. Mikael joined Ericsson in 1998 and is based in Stockholm. You can engage with him on Twitter at: @mikaeleb or at LinkedIn.